Dealing with Members’ Attempts to Cancel Their Contract

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Rob Barry Feature

We know that cancelling a health club membership can be confusing. After all, it can be spelled "cancelling" or "canceling." It's quite maddening, really.

For us, that is. For our members, it should be a piece of cake, but too many of them just don't seem to view it that way.

We will concede, and always have, that our industry has a well-earned and terrible reputation for managing cancellations. For example, in 2011, Urban Active became a high-profile target of such accusations in a class action lawsuit — ultimately settled in 2013 — that claimed, according to a settlement website, "that Urban Active breached its contracts, unjustly enriched itself, and violated state consumer protection and health spa statutes during the sales, servicing, billing, and cancellation of its contracts." Such cases have left a scar on the public's mentality, always reinforced by untold numbers of publications and websites that want to help consumers "Avoid Getting Ripped Off At The Gym."

So, yes, we sort of suck as an industry. But people suck, too. You're just not allowed to say that out loud, or post that on Facebook, or write that on Yelp, or complain to the Better Business Bureau about that. We're just supposed to take it.

The thing is, we shouldn't have to. And you shouldn't have to either — not if you have clearly defined cancellation policies that are spelled out in your contract and appropriately reviewed with new members.

By way of background, our cancellation policies are the most member-friendly we have ever seen. We require only 14 days advance notice, whereas our state allows us 45 days. The law allows us to require cancellations be sent via certified mail, but we have a website to accept requests.

Most of our members start on an initial 12-month contract that can be cancelled due to a medical issue or relocation. A doctor's note or proof of move must be provided. After those 12 months, the membership becomes open-ended and can be cancelled at any time for any reason with that 14-day notice. All of this is in our contract, and everyone signs and initials these key clauses.

A few times per year we'll hear "nobody ever told me that the membership was going to continue after 12 months." We did, and we can show you where you agreed to this provision. We know we can't recreate the words that were said by our staff person when you joined, but we are sure our staff didn't just point at the paper and say "initial here, initial there." They had to tell you something, and you agreed to it.

When that "nobody every told me" conversation happens just a month or two after the 12th month, then it's not too bad. When it happens two years later, well, that's not so much fun. That's when there's a lot of yelling and screaming about a refund.

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Unless we've done something wrong or the contract was executed incorrectly (missed signatures, missed initials) we do not do refunds. In fact, we will often ask members what we've done wrong. We explain that our facilities have been open and available. Our monthly billing is done very clearly, and we communicate with our members regularly via email, text and mail. So, the fact that someone has a membership to our clubs and is paying monthly is never hidden. When it gets unpleasant, we sometimes have to say things like, "You went two years without looking at your bank or credit card statement, and that's our fault?" We don't like saying that.

One woman demanded a refund for more than a year's worth of dues because "I had no way of knowing that you were still billing me." We said, "There was a line item in your checking account statement every month with our name on it." Her response: "Other than that."

Other than that?

Many people simply do not want to accept reality. We had a member who submitted her cancellation request from our website several days later than she thought she had. She was too late to prevent her next billing. She insisted that she had sent it in plenty of time, in advance of our 14-day notice requirement. The problem was that everything was time-stamped, so there was no question as to when she had submitted it.

No, she insisted, she had sent it on time. We even contacted our web hosting company to see if anything had been bottlenecked in its system those days, and we were assured that everything had operated normally. That company even contacted Yahoo! to confirm the time stamp of the email receipt that was sent to her upon submission of her cancellation request. It was all consistent and accurate.

But, no, she pressed on. "The Internet is wrong. You know, computers make mistakes. I know I sent this on time."

The Internet is wrong?

Many people become threatening and say that their attorney will call us or that they are going to tell "all their friends" about our "business practices." We usually turn that back around on folks and encourage them to please do so. We're happy to show any attorney a properly executed contract, and we tell everyone that we are quite proud of our business practices.

We recently encouraged one angry member to "please print the attached contract and show this to your friends so that they can see how open, transparent and thorough we are in our approach to business." This same member even accused us of having modified his contract after he signed it, since he never would have agreed to our terms. We encouraged him to take a close look at his contract before he accused us of a crime.

Sometimes, people just make us laugh. There was a young lady who wanted to cancel while in the midst of her initial 12-month term because she was moving — around the block. We had to point her toward the clause about moving 25 additional miles away from her current address.

Then there was the member who wanted to cancel because he had taken a new job in New Jersey. We explained that his job being far away was not a reason to cancel. Several weeks later, we received another cancellation request, this time with proof showing that he was now residing in New Jersey. He wrote how we had "forced" him to relocate.

You moved in order to cancel your health club contract?

We've had many attempts at fraud. When we used to take cancellations via email, rather than through a website form, we had a member who insisted he had emailed his request. We asked him to please find it in his "Sent" folder and we'd be happy to process his request and give him a refund for prior months. What we got was a poor attempt at crafting an email using Microsoft Word. He pasted in the Yahoo! email logo, and tried to make it look like a real sent message, which it obviously wasn't. We've also had forged doctor's notes, made-up lease agreements and old driver's licenses presented to us.

And then there was the individual who was nothing short of reprehensible, and winner of the all-time prize. He came into our facility to tell us to stop billing his daughter, because she had died.

"You mean the same daughter who called last week asking about how to freeze her membership?"

Yep. She was dead. So, since there was no mention anywhere in our local media about the untimely passing of this vibrant young lady, we asked him for a copy of the death certificate. (Remember the "Seinfeld" episode in which an airline asked George Costanza for a death certificate in order to receive a discounted flight?)

Unfortunately, we did have to cancel this membership due to a technicality. Her paperwork was not properly executed. (Full disclosure: your humble co-author Barry was the one who screwed it up. She had not signed everything). Our consolation was that there is going to be a special place in hell for this father for having said such a thing out loud.

Nevertheless, it's the nature of our business. These are the kinds of stories that we enjoy swapping with other club owners, because it's always a bonding experience. People suck. You're just not allowed to say that.

Share your worst membership cancellation stories on twitter using #ABMemberStories.

MORE ROB & BARRY: Six Strategies for Selling Club Memberships

This article originally appeared in the October 2014 issue of Athletic Business with the headline, "People Suck."

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